If not NPS, then what?

Previously, I looked at the pros, and cons, of NPS as a tool for measuring your organisation’s CX. Today, having slain the dragon, I’ll try to help you rebuild the tatters of your CX life and identify what you should be doing if not NPS.

What was the problem again with NPS as a measure? A good question, I’m glad you asked. To recap, NPS is usually a very broad metric of customer response to a specific question and, as such, it bears little relation to actual business performance. Just because Company A has a higher NPS than Company B, you’d expect it to be… what? Larger? More profitable?

That’s clearly not true. BT Group has an overall NPS of around 15 and yet is a larger company than 3 (NPS of 27) or Vodafone (60). Similarly, BT TV has an NPS of 13 yet has far smaller reach than Sky (-5).

As an industry, telecommunications is ranked 16th out of 20 for NPS, lower even than Insurance (32 v 54 overall) and yet it remains a profitable industry.

To understand how to measure CX, we must first understand the impact it can have on a business. To do this, let’s look at some statistics:

  • 42% of B2C customers purchase more after a good customer experience
  • 52% of B2C customers stop buying after a bad customer experience
  • 24% of customers continue to use a vendor for more than 2 years after a good experience
  • 39% continue to avoid a vendor two or more years after a bad experience
  • 87% of customers who have a good experience will share the story with their friends (just under half via social media)
  • 95% of customers who have a bad experience will share the story with their friends (over half via social media)

So the picture starts to build. For starters, the underlying trend and business impact is that a good CX will lead to customers buying more, becoming loyal, repeat consumers and encouraging their friends to do the same.

And it seems that the negative consequence of a BAD experience is greater than the positive effect of a GOOD experience. Getting things wrong will turn more people against you for longer, whereas getting things right will impress fewer people and for less time. Some statistics suggest it will take twelve positive experiences for a company to recover from the impact of a single negative experience.

A good customer experience, then, is not an end in itself, it’s a means to a well performing business. The measure of a good customer experience is the measure of a successful business. And that has always has been about financial performance:

  • what is the churn rate of your customers?
  • what is your ARPU?
  • what is your share of wallet?
  • what are your customer service costs?
  • what is your underlying profitability?

If the purpose of a good CX is to have a financially successful business – and the way to achieve financial success is through good CX – how is this achieved? Again, there are a number of statistics about what customers want from a business, for example:

  • 69% of customers attribute good customer service experience to quick resolution of problems
  • 89% of customers get frustrated if they have to repeat their details to multiple representatives
  • 75% of online customers expect a response within 5 minutes

But here is where the real work comes in. Not all companies are the same. They don’t all target the same customers, or customer segments. Their services are not all identical. It is vital to understand what YOUR customers want from YOUR company, not what theoretical customers want from a theoretical supplier.

There are two key questions:

  1. How is your customer experience defined?
  2. Does it meet what your customers expect from you?

Defining a Customer Experience

Some companies are (arguably) today a brand before they are a vendor. An Apple fanatic is very unlikely to switch to Android unless something very drastic happens. An Omega watch enthusiast is unlikely to give it all up and switch to Tag Heuer just because of one bad experience. The driver of a Jaguar won’t switch to Dacia without a significant change in circumstance. But an environment like this is a rarity and one that is earned over a long period.

More relevantly, a quad-play telco customer who follows Premiership football is unlikely to switch to a provider without TV & sport offering

Apple, Bentley or Omega’s customer experience is far more than a single transaction. It’s more, even, than a full user journey from identifying a need, through purchase to ownership and in-life service. These brands have earned that status, built that customer experience, through a combination of their product, its price, knowing what their customers want and having processes in place to deliver it. In some cases, like with Jaguar, this reputation will keep the company going even when the product itself falls below the established, and expected, standard.

The quad-play customer won’t be watching Everton v Huddersfield on a Sunday afternoon just because of Sam Matterface.

Which leads on to:

What your Customers Expect From You

Your customer experience is a result of everything your company does, not just how much you charge for delivery, or how fast your call centre responds. It includes the company’s products, prices, processes and – increasingly now – its social responsibility position.

Apple, Jaguar or Omega customers don’t buy them because they are cheap. Xiaomi, Dacia and Casio customers don’t buy them because of the great after-sales service and reliability.

While statistics like those, above, can provide general trends on what customers want to see, to feel they are getting a good experience – no successful corporation sets out to provide slow fault fixes to customers or intending that issues have to be handed off to multiple agents, or to offer a poor service – it is important to understand how your customers see you and what they want from you, in order to be able to offer the right customer experience.

Talk Talk Group make few bones about being a value B2C telco. There is not a high degree of automation in their back office and it’s recognised that their customer service can be slow. They tend not to compete on high bandwidth services to consumers.

Real sport fans have, traditionally, taken Sky subscriptions and Sky capitalised on this to offer quad-play telco packages, adding mobile, fixed and broadband. BT Consumer has lived on its position as the “monopoly” (or Universal Service Obligation) supplier to try to appeal to everyone – starting with traditional telephony and recently entering the TV and sport market. It’s products are relatively expensive in the marketplace and this is not always reflected in the services received. This has allowed other players to steal a march on fibre broadband (Eg City Fibre) or mobile (Three, Voda) or content (Sky and now new entrants like Amazon or Netflix). And yet BT has several million residential customers.

Perhaps this is reflected in their relatively low NPS. And for TTG, they remain a significant player, despite an NPS of -30.

Understanding the expectations of their customers is a key business driver for both of these companies. No company can afford to watch their financial results decline, irrespective of their NPS score’s trend, and then start to ask the question of where they are failing their customers.

Next time we will look at how true CX insights are achieved and how this can be used to drive business transformation.

Setting the Right Expectations – a CX Cornerstone

The route to the top of Customer Experience in the Broadband market, especially in the UK, has been fought, as much as anything, over headline speeds for downloads as any other feature.

BT offer an 80Mb speed, Virgin trump it with 100Mb. BT counter with 150Mb, Virgin respond with 200MB and so on, seemingly ad nauseum.

In some UK telcos, complaints or queries over broadband speed can comprise upwards of 40% of the inbound calls and queries from customers. Only billing rivals speed as a source of customer dissatisfaction; all other issues are some distance behind.

And, to be honest, it’s not really surprising. With most other goods and services, you expect a correlation between what you’ve been sold and what you get. Buying a backpack or suitcase advertised as “holding upto 80 litres” only to find it would struggle to hold half that volume would lead to complaints, so why not a broadband service that claims to offer “upto 80Mb” but in practise only gives 40Mb?

From a technical, network perspective there are dozens of reasons why broadband speeds vary from house to house, let alone country to country and the purpose of this blog is not to explore them in depth. Suffice to say that – for the most part – in countries such as the UK which rely predominantly on copper connections, the longer the wire – the slower the speed. And the more people using the network the slower any one person’s experience of it will be.

New rules are coming in which will seek to address this head on but, as with many other technology-related laws it remains to be seen whether the intention matches the outcome. I’m sure that nobody involved in the legislation regarding cookies used on websites intended to leave every internet user plagued with notifications taking up the screen every time they visit a website.

There are two key lessons for fixed line telcos to learn here. One is, perhaps, more obvious than the other. The more straightforward-sounding lesson is to be more honest about what the customer is being sold.

The new legislation will help towards this. It is obliging CPs to move away from selling broadband based on a headline “upto” speed and towards an average speed. There will be a formula that CPs have to use to determine what figure they can use for this average speed – based on a distribution curve of what customers currently taking the product receive today; speeds achieved during quiet periods ( weekday mornings) and those achieved during the busy hour (typically early Friday evenings) for customers of the same type as them.

It should go without saying that a customer sold a broadband package on the basis of “average 40Mb download” is likely to be happier with the purchase if he’s getting 40Mb, than if he bought the same thing when sold as “upto 80Mb download” even if everything apart from the name is identical between the two. Set an expectation with the customer that you can, and will, meet is hardly rocket science in the world of CX.

Dig a little further beneath this, though, and things will get a little more complex. Especially in a market like the UK which has such a mix of technologies delivering broadband; where some customers are still stuck on technologies that cannot deliver more than 8Mb, others 16Mb, still others on 24Mb, right the way through to the annointed few with full fibre (FTTH) connections who can get hundreds of MB.

Even worse, millions of premises will be served by more than one of those technologies, meaning someone could be paying £40+ per month for an “upto 24Mb” service when a cheaper, faster service is already available to them. And, to complicate matters further, for some people their speed on the faster service may actually be lower than their actual speed on the slower, older technology.

Still with me? Phew!

So, confidence that this new legislation will guarantee a country full of happy customers, who are getting exactly the broadband service they want and need is, understandably, not quite at 100%.

Maybe it should go a little further? Gas and electricity suppliers have recently been obliged to start telling existing customers whether they are on the cheapest tariff. Maybe telcos should be obliged to provide clear options to customers about the services available, a realistic view of the performance they are likely to recieve, and their cost? For example

  • You are currently paying £40/month for our 24Mb service and you are getting an average of 21Mb
  • You could switch to our £25/month service where we predict you will get an average of 38Mb
  • Or our £30/month service where we predict you will get an average of 72Mb

Certainly, most telcos will have these facts to hand, based on their own knowledge of their network and its performance.

However, this leads to my second suggestion on how to improve this experience. What do these numbers mean, to ME as a customer?

Based on the example, above, I can see that it’s silly for me to be paying more for a service that gives me less. But what does 38Mb actually mean to me? Do I need that extra 34Mb, or will I just be spending £5 a month I don’t need for a 72Mb product?

If you are a quadplay telco, your range of products and options for customers to choose will already be hellishly complicated – different TV packages, sport or no sport, HD, SD, Netflix, on demand, IP calls, PSTN calls etc etc. Asking customers to also choose whether they want 38 or 72 (or 150 or 300 or whatever the future offers) is an unnecessary complication.

Bandwidth does not need to be a primary differentiator. In itself it does not do anything for your customer, apart from a tiny bragging right to their mates, for some people. For the rest of us, bandwidth is a means to an end.

Living on your own, or not interested in streaming ultra-high definition content? You’re unlikely to need more than 16Mb. Ever.

A switched-on family with kids at home? Likely to need to support multiple HDTV streams and HD sport and gaming (and uploading a Twitch stream) and phonecalls? Much below about 60Mb is going to mean someone in the household will miss out.

So maybe the smart way to resolve the customer experience around broadband is to stop making the broadband customer experience about speed and move it to services. In the immediate term, this would remove issues around customers who are paying for an “upto 80Mb” service and only receiving what they’d get from a cheaper “upto 40Mb” service – and eliminate potential cases of mis-selling.

In the longer term, this gives customers a simpler buying experience and, in all likelihood, a simpler in-life service experience. Ignore whether I’m getting 40, 80, 150Mb and focus on whether I’m consistently getting the services I’m paying for at the quality I expect:

  • Do all my Netflix films stream in HD?
  • Does my football match, or grand prix buffer?
  • Does my audio download jitter?
  • Are my phonecalls clear?
  • Do my online games lag?

If the answer is always yes, your customers won’t care what their download speed is and customer satisfaction should improve. Sustainably.

New Services, new customers – a new, old challenge for the telco industry

The comms industry faces a variety of challenges to remain profitable – against a background of falling mobile handset sales and the move away from traditional calls revenue towards IP voice services. The key defence against this is by growing new revenue streams through enablement of new services to customers. And the common feature that these services need is higher bandwidth links to the customer.

Providing more bandwidth will invariably require some uplift in physical comms infrastructure, whether in the exchange, mobile mast deployment, roadside cabinets, the cables between them or the cables out to the end customer’s premises. Delivering this infrastructure is an expensive, complex process typically requiring (in the UK at least) coordination with Government agencies and numerous third parties. While the model may differ slightly between countries with an established fixed-line network and those which are more mobile based, similar challenges can be found.

As well as being the means to increased revenue, infrastructure build is a very expensive activity and, when managed poorly, one which can lead to a high degree of wasted investment. There are two headline metrics for this:

  1. The cost per end customer to deliver new infrastructure. This is typically around £400-500 per customer, but can be as high as £700-800
  2. The %age of spend which ends up in the ground, delivering services, as opposed to being wasted on management, rework or other cost of failure. Again, while the average is around 40-60% of investment actually being spent on infrastructure, some companies struggle to reach half this figure.

The efficient delivery of infrastructure depends on a well managed lifecycle, to:

  • identify the demand within a particular geography (a street, housing estate, exchange area)
  • prioritise the areas of high demand – those which will generate the greatest return on infrastructure investment
  • understand the “bill of materials” needed to deliver working infrastructure end-to-end
  • manage the build of this infrastructure to an efficient and timely completion
  • bring the new infrastructure into active use and be able to sell products and services to end customers, through it
  • maintaining an ongoing view of existing uptake and future demand to feed into the build plan

While it may be simple to think the customer’s concerns focus on straightforward purchasing a service once the infrastructure to support it is available, brand reputation and customer satisfaction can be impacted much earlier than this. Chief amongst these Moments That Matter to the customer will be a lack of communication during the build phase, especially over any delays that might arise which will impact the date when the promised service will be available.

At this stage, the customer’s expectations will be high. They will have been contacted by the telco to identify their interest in new services. They may have been offered promotional rates, as an inducement to sign up early to the new services. They will believe that any dates communicated to them are committed. As a bare minimum, it will be necessary to provide regular updates to the customer, reassuring them that work is progressing according to plan. In situations where delays arise, customers will value honesty and transparency over this with early visibility of issues and changes to plans.

As more companies move into infrastructure build, within the UK at least, customer experience will be impacted by a wider number of moving parts. Some telcos may take direct ownership of all aspects of the plan and build; some telcos will outsource some, or all of their plan and build activities to one, or more, third parties; while others will remain in the retail-only space, reliant on infrastructure built by other organisations.

Those companies managing, or controlling their own infrastructure build will want to ensure as much of their investment goes into service-delivering infrastructure to maximise return on investment and reach the greatest possible footprint.

In all of these scenarios, it will be vital to provide customer experience differentiation, through a tightly integrated stack which allows marketing data to drive planning decisions; planning to be efficiently allocated to labour teams; the progress of those labour teams to be closely monitored, optimised and reported on, both internally and to customers; and for revenue income to be maximised by efficient sales enablement.